Nigeria’s Inflation Rate Plummets to 24.48% in January 2025: What Does This Mean?

In a surprising turn of events, Nigeria’s National Bureau of Statistics (NBS) announced on February 18, 2025, that the country’s annual inflation rate dropped sharply to 24.48% in January 2025, down from 34.80% in December 2024. This significant decline follows the first rebasing of the Consumer Price Index (CPI) in over a decade, a move aimed at recalibrating how inflation is measured in Africa’s most populous nation. But what does this mean for Nigerians, and is this drop as good as it sounds?

Understanding the Rebasing

The CPI rebasing is essentially an update to the basket of goods and services used to calculate inflation. Over time, consumption patterns shift—what Nigerians spent money on ten years ago isn’t the same as today. The NBS adjusted the weightings of items in the index to better reflect current realities, such as increased reliance on digital services, transportation costs, and staple foods like rice and yam. This overhaul, the first since the early 2010s, was long overdue and aligns Nigeria with global statistical best practices.

The result? A headline inflation rate that fell by over 10 percentage points in a single month. It’s a dramatic shift, but economists caution against popping the champagne just yet.

Inflation Drop: Real Relief or Statistical Mirage?

While the numbers look promising on paper, the rebasing doesn’t necessarily mean prices in markets across Lagos, Abuja, or Kano have suddenly plummeted. Inflation measures the rate at which prices increase, and rebasing adjusts how that rate is calculated—not the actual cost of goods. For instance, a loaf of bread that cost ₦1,000 in December 2024 might still cost ₦1,050 in January 2025, but the new CPI framework might weigh it differently, softening the perceived inflation spike.

Nigerians on the ground might not feel this “relief.” The cost of living remains a pressing issue, with fuel subsidy removal, naira depreciation, and global supply chain pressures still biting hard. Social media reactions have been mixed—some hail the drop as a sign of economic stabilization, while others dismiss it as “government mathematics” that doesn’t put more money in their pockets.

Why This Matters

For policymakers, this rebased inflation figure could signal progress in President Tinubu’s economic reforms, especially as the administration seeks to attract foreign investment and stabilize the naira. A lower inflation rate might ease pressure on the Central Bank of Nigeria (CBN) to hike interest rates further, potentially spurring lending and growth. It also provides a fresher benchmark for the 2025 budget, which relies heavily on optimistic revenue projections from oil and taxes.

However, the real test lies ahead. If subsequent months show a sustained downward trend—beyond just statistical adjustments—it could rebuild public trust in economic management. For now, the NBS’s rebasing is a technical win, but translating it into tangible benefits for Nigeria’s 200 million-plus citizens remains the bigger challenge.

Looking Forward

The January 2025 inflation data is a starting point, not a finish line. Analysts will be watching February’s numbers closely to see if this drop holds or if it’s just a blip from the rebasing effect. Meanwhile, everyday Nigerians continue to grapple with high food prices, transport fares, and energy costs—issues that no statistical tweak can erase overnight.

What’s your take? Do you think this inflation drop will make a difference in your daily life, or is it just numbers on a page? Drop your thoughts in the comments below!